December 16, 2024 • 26 mins
Think estate planning is just for the wealthy? Think again! We bust this and other common myths wide open in our latest episode, where we blend humor with insightful analysis to make estate planning a topic everyone can understand and appreciate. You’ll learn why estate planning isn’t just a financial tool for the elite but a vital step for anyone who wants to ensure their wishes are respected and their loved ones are cared for, regardless of the size of their estate. We even throw in a playful playlist of estate-themed tunes to keep the mood light as we tackle this serious subject.
We dive deep into the essential documents that form the backbone of a comprehensive estate plan, from powers of attorney and living wills to trusts and beneficiary designations. Discover how these important tools empower you and your designated individuals to manage your affairs during times of incapacitation. We aim to equip you with the knowledge to confront life's uncertainties with confidence, ensuring your assets are distributed as you wish and providing peace of mind for you and your loved ones. Join us in navigating through these essential conversations with a mix of levity and gravity, challenging conventional wisdom and empowering you to set up a solid plan for the future.
We love to hear your thoughts, questions, and ideas. Send us a text!
Developing your financial bullshit sniffer one episode at a time.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
welcome to bullshit on stilts, a podcast hosted by
two guys with vast financialbackgrounds and great bullshit
sniffers who call out the clichecrap, spackle and flapdoodle
spood by so-called expertsacross the landscape of
financial advice identifying asdoctors of bullshit ology.
You can count on your steamhosts, maybe knuckleheads, to
(00:25):
bring you a lively, if notdeadly, mix of serious analysis,
hijinks and tomfoolery, allwithin a 99.1% bullshit-free
safe space.
Let's get after it.
Welcome back to Bullshit onStilts.
Today, on Bullshit on Stilts,we're going to head back to
(00:49):
applying our bullshit snifferson a little old topic known as
estate planning.
I know it's not a favoritetopic.
I mean, really, who wants totalk about becoming
incapacitated or dying, or maybeinfighting of our adult
(01:10):
children upon our passing,because one wants something and
the other one's going to get it,and so forth and so on?
We talk about transferring ofassets to our loved ones and our
charities upon our passing.
We talk about minimizing taxes,about action plans if I become
incapacitated due to accident oran illness, even action plans
(01:32):
if I become terminally ill andthe types of health and medical
care I desire in that condition.
We provide for the managementof my financial responsibilities
as well as my health andmedical care if I am
incapacitated.
We think through and identifyguardians to my minor children
(01:53):
God forbid something happens tome and their parent and
ultimately reducing delaysassociated with the probate
process and the publicity ofprobate itself.
So it's a big deal that none ofus really want to talk about.
It can be a tough discussionfor folks and oftentimes, when
(02:19):
it is a tough discussionemotionally or psychologically
or what have you, you know,people often will respond with
the idea of this perfect plan.
And the perfect plan, remember,is simply denying the reality
of life.
Well, I'm not going to dieearly.
Well, I'm not going to becomeincapacitated.
Well, I won't have an injurywhen I'm skydiving.
(02:40):
Well, I won't have an injurywhen I'm deep sea scuba diving.
We love, especially men, tobelieve in the perfect plan
Nothing is going to hurt metonight.
Wouldn't it be great, since thisis such a tough subject for
people to talk about, wouldn'tit be great if we could just put
(03:01):
a record or CD on and listen tosongs about this stuff, since
it's so damn dry and it can besometimes a little boring.
Oh, that's right, kelly.
Listeners will be treated toover 47 hours of the least
listened to love songs recordedby some of the least musically
inclined estate planningattorneys, located in some city
(03:23):
I just can't recall.
Who can resist grabbing theirpartner and swaying slowly to
songs like take my kids andraise them by the birthing units
, or I want you to have this bythe eclectic group the gifters.
And who can forget, make mydecisions for me, because I
can't performed by thatone-of-a-kind rock band, the
forgetfuls?
How about the unnominated songPower of Attorney?
(03:45):
I got you by Funs and Heal andmy personal favorite, the disco
platinum song.
Trust Me, I Love Ya, but youcan't have it all in one lump
sum.
So what is an estate plan?
What is that whole thing about?
And I'm going to reallysimplify this one Not an
attorney, I'm not a legaladvisor.
Anything that we're talkingabout today is just general
(04:07):
information and knowledge tohelp develop your bullshit
detectors.
When it comes to thinkingthrough, do you need an estate
plan?
The answer is yes.
Talking about estate planning,thinking through it, those are
just tough discussions.
We talk about maybe becomingincapacitated or dealing with
(04:30):
chronic illness or maybe aterminal illness that may have
us sticking around for 6, 12, 24months and or we pass away
unexpectedly.
So all of those things have todo with life events that will
have us call upon our estateplans to help protect our wishes
(04:56):
, our values and how we want tobe cared for in some of those
tougher time frames of life.
So first, let's kind of thinkabout some of the biggest myths
out there when it comes toestate planning.
So we'll talk about I don'tknow five or so.
(05:17):
So first is only the wealthyneed an estate plan.
Second myth a last will andtestament, that's enough, I
don't need anything else.
Third is estate plans are onlyfor older people.
Fourth, you don't need anestate plan if you're married.
Everything's going to go toyour spouse.
(05:38):
And fifth my family willinherit everything automatically
.
I don't need to do anything.
So let's begin by agreeing abouta universal truth when it comes
to life, and that truth is very, very simple.
It's one word Uncertain.
No, uncertain, life isuncertain.
(06:02):
While Benjamin Franklin oncesaid there are two certainties
in life death and taxes, andobviously I think that's a
pretty accurate statement.
But I think life beinguncertain is something every
single human being throughouttheir lives will experience and
(06:22):
ultimately it's an irrefutablefact uncertainty.
So what's uncertainty, right?
Unfortunately, the future isunwritten.
It's unknowable.
We don't know what's going tohappen.
We do know the sun will rise,but do we know, beyond a shadow
of a doubt, we will rise?
Do we know that tomorrow we'regoing to feel good or will we be
(06:45):
coming down with some kind ofan illness?
We don't know.
It's uncertain.
Will I have a good night'ssleep tonight or will I get up
38 times to go to the bathroom?
It's uncertain.
Sometimes words hit a person alittle bit off and we missed the
intended meaning.
So just in case we're not onthe same sheet of music, here's
a few words that are similar touncertainty Misgiving's one,
(07:10):
anxiety's another and oh, by theway, doubt, I don't know.
So uncertainty right, we justdon't know.
Now, the opposite ofuncertainty is assurance,
conviction, confidence.
These terms are something thatwe want to achieve through
planning our estates.
(07:34):
So before we move forward andstart talking about some of the
legal documents that make up aperson's estate plan, let's just
kind of tackle some of thesemyths real quick, you know, the
first being estate planning isonly for the wealthy.
Well, the reality is, estateplanning kind of makes us think
(07:54):
about someone having a chateauand a castle, and maybe men in
arms and all these wealthy folks.
But the reality is, estateplanning is a heck of a lot more
about making sure that if youbecome incapacitated, if you
have a chronic illness, along-term care illness, terminal
(08:15):
illness, that your wishes, whenthe health care system is
caring for you, are followed,acknowledged and fulfilled.
That's a big part of estateplanning.
So, whether you're wealthy ornot, you're still a person.
You're a human being that hasall sorts of beliefs, views and
values when it comes to, forinstance, being resuscitated or
(08:39):
not resuscitated if you're aterminal ill individual.
So estate planning isn't justfor the wealthy, it's for
everybody out there that faces ahealth care system that can
keep us alive far longer thanmaybe any of us want to be kept
alive, right?
So estate planning, it's foreverybody.
(09:02):
The next myth a will's enough.
In reality, a will is one ofthe key documents of an estate
plan, but it's not just enough.
There are pros and cons to thewill.
In fact, for most people, awill really deals with two,
let's say three key things.
(09:22):
One, it ensures that any of theassets that are owned in your
personal name will be given orinherited by the specific people
you list within your will.
You list within your will, soif you own your house personally
(09:43):
and you pass away, your willwill govern who gets the house
and or who splits up the valueof the house.
If you have more than onebeneficiary in your will, the
other part of the will is youget to name someone that gets to
represent you after yourpassing.
And thirdly, if you have minorkids, that will is where you're
going to identify the guardiansof your minor children if you
(10:08):
and their biological otherparent were to pass away
simultaneously.
It's a pretty importantdocument, but it's not the only
document an individual needs.
Next myth was some people thinkthat it's just for older adults
and while older adults arecertainly folks that tend to pay
(10:29):
attention to their estate plansmore, put the time and effort
in and putting documents inplace, the fact is is in America
.
Fact is is in America, once youturn the age of 18, in most
states across the union, you areviewed in the eyes of the law
(10:49):
and the medical and healthcarecommunities as an adult, meaning
that your mommy and daddy can'tmake decisions for you and your
spouse may not be legallyauthorized to make decisions for
you.
That means that if there wasnothing in place from an estate
planning standpoint, from legaldocument standpoint, your family
(11:13):
would have to go to the familycourts in the county that you
live in to file a case wheresomeone is identified by the
court to be your conservator andor guardian.
So think about the cost ofattorneys and court cases, the
time delays and all sorts ofother things.
(11:35):
And oh, by the way, there's noguarantee the court's going to
identify and select theindividual that you would have
had you had some time to thinkabout this.
So it's not only for olderadults, it's for anybody 18 and
over.
Next myth you don't need anestate plan if you're married.
Well, every individual adultneeds an estate plan, whether
(11:57):
you're married or not.
And we go back to the other onethat I just talked about, you
know, for older adults.
All of those reasons requireeach individual adult to have
some form of an estate plan putinto place.
Another myth my family willinherit everything automatically
.
And unfortunately, that's ahighly inaccurate statement.
(12:21):
You see, if you don't have anestate plan, if you don't have a
will, if you don't have any ofthe other documents, the state
that you live in, that willdecide who gets what out of your
overall assets, your personalassets, that is, it'll decide
who gets your house, who getswhat percentage of your personal
assets.
That is, it'll decide who getsyour house, who gets what
(12:42):
percentage of your personalassets, and you have no control
over that, so the state willmake your decisions.
If you see fit not to thinkthrough and prepare your own
estate plan and, lastly, I cando it all online without
professional help.
There is certainly some truthin that.
There are a lot of onlineplatforms that you can prepare
(13:06):
much of your estate plan with,whether it's Law Depot,
legalzoom, legalshield I mean,the list is pretty exhaustive
out there.
But here's the one thing Aperson needs to consider that,
while you'll save a lot of moneyby going online and preparing
your own forms, those forms mayor may not be precisely what you
(13:28):
need at the moment that yourequire your estate plan to
spring forward and protect you,your values and your wishes.
So it's always recommended toseek out competent legal
professional advice when itcomes to doing your estate.
Nothing stops you from puttingtogether your documents on an
(13:49):
inexpensive platform and thenscheduling a meeting with an
attorney to discuss thosedocuments and see if there's
anything else that needs to bedone anything else that needs to
be done.
Let's take another step forwardand get a little bit more
familiar now with the documentsthat have to do with estate
(14:09):
plans.
While there's a number ofdifferent legal documents that
basically become part of anindividual's estate plan, the
first document we've talkedabout a little bit already is
the last will and testament and,like I said earlier, that
document really applies toassets that you own personally,
(14:32):
and it gets kind of confusingwhen it comes to this stuff.
Right, someone just made mevery angry.
So a personal asset is, youknow you go out and buy a car,
the car is titled in your name.
That is viewed by the legalworld and the estate planning
world as a personal asset.
Your name's on it.
If you go out and buy a houseand you own it in your name,
(14:54):
that is a personal asset and, asa result, everything in the
house along with the house willbe viewed as a personal asset,
and thus, in my two examples acar and a home and the contents
inside the home the last willand testament, based on owning
those things personally, wouldgovern who gets what and or what
(15:16):
percentage of the value of allthose assets, who will get what
percentage of that.
So that's where the will isgoing to step in when it comes
to your assets and making surethose assets are passed to loved
ones and or organizations thatyou personally choose, rather
than leaving it up to the state,your estate upon your passing
(15:49):
the executor of that estate.
It also gives you the abilityto identify different people and
or organizations that you wantto receive some of or all of
your assets that you personallyown.
And, lastly, if you have minorchildren, the last will and
testament is certainly somewherewhere you identify guardians
that you want to have take overraising your children.
(16:11):
God forbid you and their parentpass away unexpectedly A
critical document.
But we're not done there.
There's so much more when itcomes to estate planning.
The next document we'll talkabout we'll talk about actually
two documents here, and it'scalled a power of attorney,
(16:33):
power of attorney or POA.
A power of attorney isbasically a legal document that
you have put together foryourself that identifies an
individual, or maybe a series ofindividuals or organizations
that will have the authority ifyou become incapacitated, unable
(16:55):
to communicate, unable to makedecisions clearly for yourself.
The power of attorney is usedto allow a person that you
identified to step up and beginto manage, in the first case,
your financial picture payingbills, even, if necessary,
(17:16):
potentially selling your home,other assets, your car, your
boats and so forth.
Within the power of attorney,you get to decide how much
authority and what type ofauthority that power of attorney
will have if and when you'reunable to make decisions or
incapacitate and can'tcommunicate.
The other power of attorneythat's part of an estate plan
(17:39):
would be a power of attorney forhealth care, much like the
power of attorney for finance.
You get to identify someonemaybe not the same person or
organization, but you get todefine someone that's going to
be there in order to makedecisions on your behalf when it
comes to your health care andtreatments because you're unable
(18:00):
to make decisions orcommunicate.
So two powers of attorney powerof attorney for finance and
power of attorney for healthcare.
So two powers of attorney powerof attorney for finance and
power of attorney for healthcare.
In my mom's world, I happen tobe the power of attorney for
finance, while my brother, who'sa police officer and a former
nurse's, aide in ICU when he wasin college, he became the power
(18:25):
of attorney for healthcareBecause he had more experience
and knowledge when it came tohealthcare.
Where I for healthcare becausehe had more experience and
knowledge when it came tohealthcare, where I clearly have
a little bit more experienceand knowledge when it comes to
finance, it does not have to bethe same, all right.
So we've gone through the lastwill and testament real quickly,
obviously.
We've gone through the powersof attorney for finance and the
(18:45):
powers of attorney forhealthcare.
So we've gone through threedocuments so far.
The next document, critical,critical document especially
given our medical system and ourscience and our technology,
that has the capacity to extendlife far beyond what we ever
thought it could just 30 yearsago.
So this document is known as aliving will.
(19:05):
So this document is known as aliving will.
It's also known as advancedmedical directives and other
titles, depending on what stateyou reside in.
A living will is really a willthat focuses on the medical
treatment and care for anindividual given certain
incapacities and or terminalillnesses that create some
(19:29):
degree of incapacity where,again, we're unable to make
decisions for ourself.
We might be unable to evencommunicate for ourselves.
So living well will identifythings like do I want to be
resuscitated or not, do I wantto have life prolonging care or
not, or do I just in the case anexample of a terminal illness
(19:51):
like my mother had do.
I just want the medical healthsystem to keep me comfortable,
to reduce pain and suffering asmuch as they can with their
science and technology andmedications, and allow mother
nature to take her course,because this terminal illness is
(20:14):
gonna win.
So the living will is probablysome of the most difficult
discussions a person will have,because you'll have to think
through all sorts of differentthings when it comes to medical
care.
And do you want that or not?
Living Will fourth documentreally, really important
(20:37):
document.
The next document we'll talkabout is a trust, and I'm going
to do this very quickly, thankyou, because not everybody needs
a trust and there are certainreasons why a person has a trust
and so forth.
But a trust is simply a legalentity that I can create that is
separate from me, theindividual.
Now, for my purposes, thattrust, if I have an investment
(21:00):
account inside the trust, wherethe trust is the legal owner of
the investment account, I stillcontrol everything, but the
trust is set up so that certainbenefits accrue to me, the
creator of that trust, certainbenefits like gee whiz.
It provides language for ifsomething happens to me, I can
(21:22):
identify someone else to managemy trust if I'm incapacitated,
if I'm unable to make decisionsand so forth, if I die, the
trust has language in it and itidentifies who the beneficiaries
of the trust's assets will bemy children, maybe my favorite
charity may be involved.
It can also have very specificlanguage by asset.
(21:46):
For instance, I've put my houseinto my trust.
In other words, my trust hasbeen titled in the county as the
owner of my house and within mytrust I can identify that I
don't want my house to be soldbecause one of my children will
have the right to live in thathouse after my passing, for I'm
(22:08):
making this up 15 years.
So I can have very specificlanguage in a trust and I can
even protect my loved ones fromthemselves.
Let's say they can't keep moneyin their pocket long enough.
Well, I can put verbiage withinmy trust to protect that one
individual from spending throughtheir inherited assets from my
(22:31):
trust by only allowing them somuch per year as an example.
Trust is a very powerful toolbut not everybody needs it.
But it is a key component andpart of a complex estate plan
(22:53):
complex estate plan.
Is there anything you'd like totalk to me about that we
haven't discussed yet Onedocument that we haven't talked
about.
It's really not a document thatcomes from an attorney's office
.
It's not that type of a legaldocument.
It's known as a beneficiaryform or a beneficiary
designation.
So earlier we talked a lotabout the last will and
testament how, in the last will,I can identify people and or
(23:16):
entities, organizations, that Iwant to receive the assets in my
estate once I pass away.
Well, those personal assets arethings that I own in my name.
There are other investments andassets that I will own that are
in my name, like retirementaccounts or a 401k account, 403b
, 457 accounts, life insurancepolicies, annuity contracts,
(23:42):
potentially.
So there's all sorts ofaccounts, not to mention bank
accounts, checking and savingsaccounts.
So there's lots of accounts outthere and with those accounts
comes a form that allows me toidentify my beneficiaries to
that account's assets if I passaway.
It's a pretty powerful form andit's critical as part of the
(24:05):
overall estate planning effortsbecause, depending on how
complicated your world is, youmay be able to have a
beneficiary designated for everysingle asset you have and not
have to worry about anythingreally going through the probate
process upon your passing andeverybody that you want to
(24:28):
receive a share of your assets.
They will already have beenidentified on these beneficiary
forms associated with accounts,policies and contracts Really
really important form.
Definitely get very good atreviewing them.
Looking at them and keepingthem up to date periodically is
(24:49):
another critical step.
So let's wrap this wholediscussion up today by just
reviewing really the whole pointof the estate plan.
And ultimately, the estate planexists so that, in the event of
a person becoming incapacitatedor in the event of their death,
(25:12):
that all sorts of financial,health and medical-related
decisions are taken care of andthey're planned.
There are people identified tostep up when and if certain
things occur.
And in order to accomplish thatand bring some certainty to this
(25:32):
thing we call life and all ofits uncertainties, we collect
legal documents as part of anestate planning process that
includes our wills, our livingwills, our powers of attorney
for finance and healthcare maybea trust.
Living wills, our powers ofattorney for finance and health
care, may be a trust andcertainly utilizing the power of
beneficiary forms to make surethat our loved ones and
(25:54):
organizations that we hold closeto our heart are able to and
will receive whatever we wantthem to receive from our estate
and our collected assets overour lifetime.
Thanks for listening.
It was great.
Hope you enjoyed today'ssession.
I know it was a little bit moreacademic, but hopefully we'll
be touching base with you soonin our next episode of Bullshit
(26:18):
on Stilts.
welcome to bullshit on stilts, a podcast hosted by
two guys with vast financialbackgrounds and great bullshit
sniffers who call out the clichecrap, spackle and flapdoodle
spood by so-called expertsacross the landscape of
financial advice identifying asdoctors of bullshit ology.
You can count on your steamhosts, maybe knuckleheads, to
(00:25):
bring you a lively, if notdeadly, mix of serious analysis,
hijinks and tomfoolery, allwithin a 99.1% bullshit-free
safe space.
Let's get after it.
Welcome back to Bullshit onStilts.
Today, on Bullshit on Stilts,we're going to head back to
(00:49):
applying our bullshit snifferson a little old topic known as
estate planning.
I know it's not a favoritetopic.
I mean, really, who wants totalk about becoming
incapacitated or dying, or maybeinfighting of our adult
(01:10):
children upon our passing,because one wants something and
the other one's going to get it,and so forth and so on?
We talk about transferring ofassets to our loved ones and our
charities upon our passing.
We talk about minimizing taxes,about action plans if I become
incapacitated due to accident oran illness, even action plans
(01:32):
if I become terminally ill andthe types of health and medical
care I desire in that condition.
We provide for the managementof my financial responsibilities
as well as my health andmedical care if I am
incapacitated.
We think through and identifyguardians to my minor children
(01:53):
God forbid something happens tome and their parent and
ultimately reducing delaysassociated with the probate
process and the publicity ofprobate itself.
So it's a big deal that none ofus really want to talk about.
It can be a tough discussionfor folks and oftentimes, when
(02:19):
it is a tough discussionemotionally or psychologically
or what have you, you know,people often will respond with
the idea of this perfect plan.
And the perfect plan, remember,is simply denying the reality
of life.
Well, I'm not going to dieearly.
Well, I'm not going to becomeincapacitated.
Well, I won't have an injurywhen I'm skydiving.
(02:40):
Well, I won't have an injurywhen I'm deep sea scuba diving.
We love, especially men, tobelieve in the perfect plan
Nothing is going to hurt metonight.
Wouldn't it be great, since thisis such a tough subject for
people to talk about, wouldn'tit be great if we could just put
(03:01):
a record or CD on and listen tosongs about this stuff, since
it's so damn dry and it can besometimes a little boring.
Oh, that's right, kelly.
Listeners will be treated toover 47 hours of the least
listened to love songs recordedby some of the least musically
inclined estate planningattorneys, located in some city
(03:23):
I just can't recall.
Who can resist grabbing theirpartner and swaying slowly to
songs like take my kids andraise them by the birthing units
, or I want you to have this bythe eclectic group the gifters.
And who can forget, make mydecisions for me, because I
can't performed by thatone-of-a-kind rock band, the
forgetfuls?
How about the unnominated songPower of Attorney?
(03:45):
I got you by Funs and Heal andmy personal favorite, the disco
platinum song.
Trust Me, I Love Ya, but youcan't have it all in one lump
sum.
So what is an estate plan?
What is that whole thing about?
And I'm going to reallysimplify this one Not an
attorney, I'm not a legaladvisor.
Anything that we're talkingabout today is just general
(04:07):
information and knowledge tohelp develop your bullshit
detectors.
When it comes to thinkingthrough, do you need an estate
plan?
The answer is yes.
Talking about estate planning,thinking through it, those are
just tough discussions.
We talk about maybe becomingincapacitated or dealing with
(04:30):
chronic illness or maybe aterminal illness that may have
us sticking around for 6, 12, 24months and or we pass away
unexpectedly.
So all of those things have todo with life events that will
have us call upon our estateplans to help protect our wishes
(04:56):
, our values and how we want tobe cared for in some of those
tougher time frames of life.
So first, let's kind of thinkabout some of the biggest myths
out there when it comes toestate planning.
So we'll talk about I don'tknow five or so.
(05:17):
So first is only the wealthyneed an estate plan.
Second myth a last will andtestament, that's enough, I
don't need anything else.
Third is estate plans are onlyfor older people.
Fourth, you don't need anestate plan if you're married.
Everything's going to go toyour spouse.
(05:38):
And fifth my family willinherit everything automatically
.
I don't need to do anything.
So let's begin by agreeing abouta universal truth when it comes
to life, and that truth is very, very simple.
It's one word Uncertain.
No, uncertain, life isuncertain.
(06:02):
While Benjamin Franklin oncesaid there are two certainties
in life death and taxes, andobviously I think that's a
pretty accurate statement.
But I think life beinguncertain is something every
single human being throughouttheir lives will experience and
(06:22):
ultimately it's an irrefutablefact uncertainty.
So what's uncertainty, right?
Unfortunately, the future isunwritten.
It's unknowable.
We don't know what's going tohappen.
We do know the sun will rise,but do we know, beyond a shadow
of a doubt, we will rise?
Do we know that tomorrow we'regoing to feel good or will we be
(06:45):
coming down with some kind ofan illness?
We don't know.
It's uncertain.
Will I have a good night'ssleep tonight or will I get up
38 times to go to the bathroom?
It's uncertain.
Sometimes words hit a person alittle bit off and we missed the
intended meaning.
So just in case we're not onthe same sheet of music, here's
a few words that are similar touncertainty Misgiving's one,
(07:10):
anxiety's another and oh, by theway, doubt, I don't know.
So uncertainty right, we justdon't know.
Now, the opposite ofuncertainty is assurance,
conviction, confidence.
These terms are something thatwe want to achieve through
planning our estates.
(07:34):
So before we move forward andstart talking about some of the
legal documents that make up aperson's estate plan, let's just
kind of tackle some of thesemyths real quick, you know, the
first being estate planning isonly for the wealthy.
Well, the reality is, estateplanning kind of makes us think
(07:54):
about someone having a chateauand a castle, and maybe men in
arms and all these wealthy folks.
But the reality is, estateplanning is a heck of a lot more
about making sure that if youbecome incapacitated, if you
have a chronic illness, along-term care illness, terminal
(08:15):
illness, that your wishes, whenthe health care system is
caring for you, are followed,acknowledged and fulfilled.
That's a big part of estateplanning.
So, whether you're wealthy ornot, you're still a person.
You're a human being that hasall sorts of beliefs, views and
values when it comes to, forinstance, being resuscitated or
(08:39):
not resuscitated if you're aterminal ill individual.
So estate planning isn't justfor the wealthy, it's for
everybody out there that faces ahealth care system that can
keep us alive far longer thanmaybe any of us want to be kept
alive, right?
So estate planning, it's foreverybody.
(09:02):
The next myth a will's enough.
In reality, a will is one ofthe key documents of an estate
plan, but it's not just enough.
There are pros and cons to thewill.
In fact, for most people, awill really deals with two,
let's say three key things.
(09:22):
One, it ensures that any of theassets that are owned in your
personal name will be given orinherited by the specific people
you list within your will.
You list within your will, soif you own your house personally
(09:43):
and you pass away, your willwill govern who gets the house
and or who splits up the valueof the house.
If you have more than onebeneficiary in your will, the
other part of the will is youget to name someone that gets to
represent you after yourpassing.
And thirdly, if you have minorkids, that will is where you're
going to identify the guardiansof your minor children if you
(10:08):
and their biological otherparent were to pass away
simultaneously.
It's a pretty importantdocument, but it's not the only
document an individual needs.
Next myth was some people thinkthat it's just for older adults
and while older adults arecertainly folks that tend to pay
(10:29):
attention to their estate plansmore, put the time and effort
in and putting documents inplace, the fact is is in America
.
Fact is is in America, once youturn the age of 18, in most
states across the union, you areviewed in the eyes of the law
(10:49):
and the medical and healthcarecommunities as an adult, meaning
that your mommy and daddy can'tmake decisions for you and your
spouse may not be legallyauthorized to make decisions for
you.
That means that if there wasnothing in place from an estate
planning standpoint, from legaldocument standpoint, your family
(11:13):
would have to go to the familycourts in the county that you
live in to file a case wheresomeone is identified by the
court to be your conservator andor guardian.
So think about the cost ofattorneys and court cases, the
time delays and all sorts ofother things.
(11:35):
And oh, by the way, there's noguarantee the court's going to
identify and select theindividual that you would have
had you had some time to thinkabout this.
So it's not only for olderadults, it's for anybody 18 and
over.
Next myth you don't need anestate plan if you're married.
Well, every individual adultneeds an estate plan, whether
(11:57):
you're married or not.
And we go back to the other onethat I just talked about, you
know, for older adults.
All of those reasons requireeach individual adult to have
some form of an estate plan putinto place.
Another myth my family willinherit everything automatically
.
And unfortunately, that's ahighly inaccurate statement.
(12:21):
You see, if you don't have anestate plan, if you don't have a
will, if you don't have any ofthe other documents, the state
that you live in, that willdecide who gets what out of your
overall assets, your personalassets, that is, it'll decide
who gets your house, who getswhat percentage of your personal
assets.
That is, it'll decide who getsyour house, who gets what
(12:42):
percentage of your personalassets, and you have no control
over that, so the state willmake your decisions.
If you see fit not to thinkthrough and prepare your own
estate plan and, lastly, I cando it all online without
professional help.
There is certainly some truthin that.
There are a lot of onlineplatforms that you can prepare
(13:06):
much of your estate plan with,whether it's Law Depot,
legalzoom, legalshield I mean,the list is pretty exhaustive
out there.
But here's the one thing Aperson needs to consider that,
while you'll save a lot of moneyby going online and preparing
your own forms, those forms mayor may not be precisely what you
(13:28):
need at the moment that yourequire your estate plan to
spring forward and protect you,your values and your wishes.
So it's always recommended toseek out competent legal
professional advice when itcomes to doing your estate.
Nothing stops you from puttingtogether your documents on an
(13:49):
inexpensive platform and thenscheduling a meeting with an
attorney to discuss thosedocuments and see if there's
anything else that needs to bedone anything else that needs to
be done.
Let's take another step forwardand get a little bit more
familiar now with the documentsthat have to do with estate
(14:09):
plans.
While there's a number ofdifferent legal documents that
basically become part of anindividual's estate plan, the
first document we've talkedabout a little bit already is
the last will and testament and,like I said earlier, that
document really applies toassets that you own personally,
(14:32):
and it gets kind of confusingwhen it comes to this stuff.
Right, someone just made mevery angry.
So a personal asset is, youknow you go out and buy a car,
the car is titled in your name.
That is viewed by the legalworld and the estate planning
world as a personal asset.
Your name's on it.
If you go out and buy a houseand you own it in your name,
(14:54):
that is a personal asset and, asa result, everything in the
house along with the house willbe viewed as a personal asset,
and thus, in my two examples acar and a home and the contents
inside the home the last willand testament, based on owning
those things personally, wouldgovern who gets what and or what
(15:16):
percentage of the value of allthose assets, who will get what
percentage of that.
So that's where the will isgoing to step in when it comes
to your assets and making surethose assets are passed to loved
ones and or organizations thatyou personally choose, rather
than leaving it up to the state,your estate upon your passing
(15:49):
the executor of that estate.
It also gives you the abilityto identify different people and
or organizations that you wantto receive some of or all of
your assets that you personallyown.
And, lastly, if you have minorchildren, the last will and
testament is certainly somewherewhere you identify guardians
that you want to have take overraising your children.
(16:11):
God forbid you and their parentpass away unexpectedly A
critical document.
But we're not done there.
There's so much more when itcomes to estate planning.
The next document we'll talkabout we'll talk about actually
two documents here, and it'scalled a power of attorney,
(16:33):
power of attorney or POA.
A power of attorney isbasically a legal document that
you have put together foryourself that identifies an
individual, or maybe a series ofindividuals or organizations
that will have the authority ifyou become incapacitated, unable
(16:55):
to communicate, unable to makedecisions clearly for yourself.
The power of attorney is usedto allow a person that you
identified to step up and beginto manage, in the first case,
your financial picture payingbills, even, if necessary,
(17:16):
potentially selling your home,other assets, your car, your
boats and so forth.
Within the power of attorney,you get to decide how much
authority and what type ofauthority that power of attorney
will have if and when you'reunable to make decisions or
incapacitate and can'tcommunicate.
The other power of attorneythat's part of an estate plan
(17:39):
would be a power of attorney forhealth care, much like the
power of attorney for finance.
You get to identify someonemaybe not the same person or
organization, but you get todefine someone that's going to
be there in order to makedecisions on your behalf when it
comes to your health care andtreatments because you're unable
(18:00):
to make decisions orcommunicate.
So two powers of attorney powerof attorney for finance and
power of attorney for healthcare.
So two powers of attorney powerof attorney for finance and
power of attorney for healthcare.
In my mom's world, I happen tobe the power of attorney for
finance, while my brother, who'sa police officer and a former
nurse's, aide in ICU when he wasin college, he became the power
(18:25):
of attorney for healthcareBecause he had more experience
and knowledge when it came tohealthcare.
Where I for healthcare becausehe had more experience and
knowledge when it came tohealthcare, where I clearly have
a little bit more experienceand knowledge when it comes to
finance, it does not have to bethe same, all right.
So we've gone through the lastwill and testament real quickly,
obviously.
We've gone through the powersof attorney for finance and the
(18:45):
powers of attorney forhealthcare.
So we've gone through threedocuments so far.
The next document, critical,critical document especially
given our medical system and ourscience and our technology,
that has the capacity to extendlife far beyond what we ever
thought it could just 30 yearsago.
So this document is known as aliving will.
(19:05):
So this document is known as aliving will.
It's also known as advancedmedical directives and other
titles, depending on what stateyou reside in.
A living will is really a willthat focuses on the medical
treatment and care for anindividual given certain
incapacities and or terminalillnesses that create some
(19:29):
degree of incapacity where,again, we're unable to make
decisions for ourself.
We might be unable to evencommunicate for ourselves.
So living well will identifythings like do I want to be
resuscitated or not, do I wantto have life prolonging care or
not, or do I just in the case anexample of a terminal illness
(19:51):
like my mother had do.
I just want the medical healthsystem to keep me comfortable,
to reduce pain and suffering asmuch as they can with their
science and technology andmedications, and allow mother
nature to take her course,because this terminal illness is
(20:14):
gonna win.
So the living will is probablysome of the most difficult
discussions a person will have,because you'll have to think
through all sorts of differentthings when it comes to medical
care.
And do you want that or not?
Living Will fourth documentreally, really important
(20:37):
document.
The next document we'll talkabout is a trust, and I'm going
to do this very quickly, thankyou, because not everybody needs
a trust and there are certainreasons why a person has a trust
and so forth.
But a trust is simply a legalentity that I can create that is
separate from me, theindividual.
Now, for my purposes, thattrust, if I have an investment
(21:00):
account inside the trust, wherethe trust is the legal owner of
the investment account, I stillcontrol everything, but the
trust is set up so that certainbenefits accrue to me, the
creator of that trust, certainbenefits like gee whiz.
It provides language for ifsomething happens to me, I can
(21:22):
identify someone else to managemy trust if I'm incapacitated,
if I'm unable to make decisionsand so forth, if I die, the
trust has language in it and itidentifies who the beneficiaries
of the trust's assets will bemy children, maybe my favorite
charity may be involved.
It can also have very specificlanguage by asset.
(21:46):
For instance, I've put my houseinto my trust.
In other words, my trust hasbeen titled in the county as the
owner of my house and within mytrust I can identify that I
don't want my house to be soldbecause one of my children will
have the right to live in thathouse after my passing, for I'm
(22:08):
making this up 15 years.
So I can have very specificlanguage in a trust and I can
even protect my loved ones fromthemselves.
Let's say they can't keep moneyin their pocket long enough.
Well, I can put verbiage withinmy trust to protect that one
individual from spending throughtheir inherited assets from my
(22:31):
trust by only allowing them somuch per year as an example.
Trust is a very powerful toolbut not everybody needs it.
But it is a key component andpart of a complex estate plan
(22:53):
complex estate plan.
Is there anything you'd like totalk to me about that we
haven't discussed yet Onedocument that we haven't talked
about.
It's really not a document thatcomes from an attorney's office
.
It's not that type of a legaldocument.
It's known as a beneficiaryform or a beneficiary
designation.
So earlier we talked a lotabout the last will and
testament how, in the last will,I can identify people and or
(23:16):
entities, organizations, that Iwant to receive the assets in my
estate once I pass away.
Well, those personal assets arethings that I own in my name.
There are other investments andassets that I will own that are
in my name, like retirementaccounts or a 401k account, 403b
, 457 accounts, life insurancepolicies, annuity contracts,
(23:42):
potentially.
So there's all sorts ofaccounts, not to mention bank
accounts, checking and savingsaccounts.
So there's lots of accounts outthere and with those accounts
comes a form that allows me toidentify my beneficiaries to
that account's assets if I passaway.
It's a pretty powerful form andit's critical as part of the
(24:05):
overall estate planning effortsbecause, depending on how
complicated your world is, youmay be able to have a
beneficiary designated for everysingle asset you have and not
have to worry about anythingreally going through the probate
process upon your passing andeverybody that you want to
(24:28):
receive a share of your assets.
They will already have beenidentified on these beneficiary
forms associated with accounts,policies and contracts Really
really important form.
Definitely get very good atreviewing them.
Looking at them and keepingthem up to date periodically is
(24:49):
another critical step.
So let's wrap this wholediscussion up today by just
reviewing really the whole pointof the estate plan.
And ultimately, the estate planexists so that, in the event of
a person becoming incapacitatedor in the event of their death,
(25:12):
that all sorts of financial,health and medical-related
decisions are taken care of andthey're planned.
There are people identified tostep up when and if certain
things occur.
And in order to accomplish thatand bring some certainty to this
(25:32):
thing we call life and all ofits uncertainties, we collect
legal documents as part of anestate planning process that
includes our wills, our livingwills, our powers of attorney
for finance and healthcare maybea trust.
Living wills, our powers ofattorney for finance and health
care, may be a trust andcertainly utilizing the power of
beneficiary forms to make surethat our loved ones and
(25:54):
organizations that we hold closeto our heart are able to and
will receive whatever we wantthem to receive from our estate
and our collected assets overour lifetime.
Thanks for listening.
It was great.
Hope you enjoyed today'ssession.
I know it was a little bit moreacademic, but hopefully we'll
be touching base with you soonin our next episode of Bullshit
(26:18):
on Stilts.
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